In a research report released Tuesday, Cowen analyst Boris Peaker reiterated a Market Perform rating on shares of Alimera Sciences Inc (NASDAQ:ALIM), with a $2.00 price target, after the eye drug company released it’s second-quarter financial results, posting revenue of $9.6 million, exceeding preannounced range of $9.3-9.5 million. However, Alimera shares are currently trading at $1.75, down $0.25 or -12.49%.
Peaker wrote, “Despite raising our 2016 estimates due to strong 2Q16 sales and management commentary relating to higher demand in 2Q16 over 1Q16, we currently model 4Q16 revenue of $13.0M, which is not sufficient to cover its ~$15-16M in operating expenses. Alimera expects to break cash flow even in December 2016 and we continue to see risk for the company to hit this guidance. We also note that although Alimera reported 2Q16 US sales of $7.2M and EU sales of $2.4M, EU operations disproportionately account for 35-40% of expenses.”
“Focus will continue to be on timing of cash flow break even as the company must maintain at least $20M in liquidity (accounts receivables and cash) to remain in good standing for its debt covenant with Hercules. As part of the agreement Hercules monitors Iluvien sales periodically with their next look expected on August 31. If July and August sales are below expectation, we believe a debt-related update is possible,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Boris Peaker has a yearly average return of 10.4% and a 47% success rate. Peaker has a -25.7% average return when recommending ALIM, and is ranked #310 out of 4085 analysts.
Out of the 2 analysts polled by TipRanks, 1 rates Alimera stock a Buy, while 1 rates the stock a Hold. With a return potential of 176%, the stock’s consensus target price stands at $5.00.